Pro Elite filed its quarterly report, and it is not pretty.  There is a ton of information in the report, and I haven't read the entire thing, but here are the key issues.

They are actively seeking financing:  The only word that can really describe their financial situation is "desparate."  They need $3 million in financing, and that is just to get to the end of the year.  Investors are starting to realize after the failure of the IFL that investing in MMA can be disastrous.

They have lost unbelievable amounts of money:  Over a period of 6 months they lost nearly $25 million.  In the quarter leading up to June 30, 2008, they lost $18 million.  This was the quarter with their big show on CBS.  

CBS is barely paying them anything:  CBS and Showtime paid them $900,000 for their show in May, and they had to pay $500,000 in production costs to get it.  This is cheap programming for CBS, they are not really all that invested in it.

It gets worse than this:  This report only covers through June 30, 2008.  They surely lost a hell of a lot more on their July show.

To be frank, I think the situation is borderline hopeless for EliteXC.  They need serious funding to keep taking these losses, and the only way they can pull out of the hole they are in is to do amazing numbers in October...which would require spending a lot of money in advertising and bringing in big names.  Even if shows do a decent number, I do not see light at the end of the tunnel.  They will still be big money losers.

As far as Pay Per View goes, I don't see it being a success, even with Kimbo Slice and Gina Carano.  By the time they do it in 2009, a lot of the curiosity will be gone, but the even bigger issue is their lack of regular television.  They are only doing shows once every three months, it works on a free basis, but we're yet to see that model work on Pay Per View.  Even if it does, and the show does 300,000 buys, which I find unrealistic, they still are losing so much money so fast that it wouldn't make up for the losses.   

If they do go down,I don't think anyone should dance on their grave.  They took a good shot at it, but competing with the UFC may be impossible unless you get a dedicated billionaire willing to give up a significant portion of his fortune to fight them. 

Note:  Feel free to add anything you find in there of value to the comments and I'll edit it in.  Also correct anything if I'm mistaken, this is complicated and dense stuff.

I always thought that the UFC was the best option for Tito Ortiz going forward, and it looks like he may be reconsidering his decision to leave.  Dan Stupp reports in his latest column for the Dayton Daily News that talks between the UFC and Ortiz have resumed:

Now, according to industry insiders, Ortiz is hosting formal negotiations with all the top promotions - Affliction, EliteXC, the AFl and even, surprisingly, the UFC.

"I don't know if we're really negotiating, or simply helping Tito stroke his giant ego," one frustrated company representative said."

Given the respective financial situations of EliteXC and Affliction, neither can afford to pay Tito the kind of money he wants.  He made over $900,000 for the fight in May against Machida, nobody is going to be able to pay him that in other organizations.

The UFC wants to lock him up to keep the star power away from other organizations.  The real question though for them is how to get the value out of him to pay off that contract when he can't beat the top names in his division.  One answer is to try to use him in a more creative way, as a coach again on TUF opposite a star they want to build up.  

My guess is we won't see Tito Ortiz fight again for a while.  He'll take the time off he needs for his name to gain strength, and come back for a nice payoff.

Hat Tip:  Sam Caplan

I wrote a piece called "Zuffa's Dangerous Summer" in April, and pointed out three potential threats: 1) Affliction's first show; 2) EliteXC on CBS; and 3) Randy Couture winning his case and pursuing the Fedor fight in one of these competing promotions.

It's now August, and it looks like Zuffa will emerge from this dangerous period as the undisputed top player in the industry.  

Affliction did far better than I guessed when they first announced the show, but they spent so much more money to do it that they have cut their second payroll by millions of dollars, and do not look to be a formidable threat at any point in the near future.  

EliteXC is on the ropes, reeling from significant financial loss and management issues. CBS does not pay them enough for them to survive without Pay Per View, but who knows if we'll ever see that?  They are not a threat, they are more like an occasional novelty act that will serve to build up names on CBS that will get better deals when they eventually sign with the UFC.  Lesnar-Kimbo may be a fight we see in 2009 in the UFC.  If they do survive and stay strong, they still won't be any kind of threat to the UFC.

Finally, things have not gone particularly well for Randy.  The arbitrator could rule for him, but his best chance was always a Texas judge hating Zuffa's unfair contracts and allowing Randy to go elsewhere.  The possibility of Couture fighting Fedor for a new promotion is the only real remaining threat to the UFC's dominance right now.

If I had to evaluate the state of the UFC right now, I would say it is excellent.  They are doing strong pay per view numbers without Chuck Liddell, Tito Ortiz, or Randy Couture, the overseas expansion is now profitable, and they have a few very big fights on the horizon.  The piece they need to fall into place now is a network deal on terms that are good for them, and I suspect that by early next year they will get it.

With all the talk lately about trash talk and hype, it's worth looking back at the way the UFC hyped Tito Ortiz vs. Randy Couture.  This is honestly kind of embarrassing to watch because it's so forced and unnatural, but relatively entertaining nontheless. 

The second video is Tito's post-fight interview after the loss.  Seeing Dana refer to Tito as his friend is really weird considering what we hear now.

The UFC is already looking to book Quinton Jackson's next fight.  Dave Meltzer reported in this week's Wrestling Observer that the UFC was looking to book him in a big match for the November show that currently has no main event. 

Bloody Elbow has learned that despite Wanderlei Silva's desire to fight in December, the UFC is trying to sign him to fight Quinton Jackson in November.  They already have Mir-Nogueira and either Penn/GSP or a Liddell fight for December, and they don't want to overpack the card at the expense of other cards.

The November show is rumored to be taking place in Portland, Oregon.

According to Bryan Alvarez, the UFC has still not found an opponent for Cain Velasquez at UFC 90:

UFC sources say that despite reports of Cain Velasquez vs. Antoni Hardonk for the Chicago show, as of this morning, there was no opponent for Velasquez.

Dave Meltzer recently noted that they are having a lot of trouble finding people to take fights against Velasquez.  He is very good, but he has no name value yet, so fighters don't see any upside in facing him.

Fabricio Werdum, the number one contender, is supposedly booked on this show against Junior dos Santos.  This fight really makes no sense at all, it's a guy that is barely known to UFC fans against another that is completely unknown.  If Werdum is the top contender, he should fight Velasquez on this show.

Georges St. Pierre made waves yesterday when he said that he needs time to rest, and that he isn't looking to fight BJ Penn until 2009.  Seeing as he has spent most of the last year and a half training and fighting, this is completely understandable, and I can't help but shake my head over the fact that some fans are mad at him over this.  I suspect it will be Liddell headlining the December show that many thought Penn and St. Pierre would headline.

If St. Pierre is looking for some time off, BJ Penn really ought to defend his title against Kenny Florian in November.  They don't have a main event for that card, and if BJ waits until Spring 2009 to fight GSP, it will mean that we will probably go over a year without a Lightweight Championship defense.

While they risk squandering a potential dream match, I find it pretty unlikely that Penn will lose, and think the guaranteed damage of putting the Lightweight Championship on ice for over a year is worse than the possible damage of Penn losing to Florian.  A successful defense would also go a long way in helping to hype the future fight between Penn and St. Pierre as well.

Loretta Hunt has a piece up on the potential Randy Couture vs. Fedor Emelianenko fight that we have all been waiting for for so long now.  Vadim Finkelstein again makes it clear that he is willing to negotiate and do this fight in the UFC, but the devil is in the details:

"We, M-1, we're not in any way against working with the UFC.  We've spoken to them before about the possibility of working together.  Anything's possible," said Finkelstein.

Finkelstein proposed that an agreement could be reached if UFC President Dana White was "willing to meet halfway." 

If round two of negotiations with Zuffa were to take place shortly, Finkelstein said he might be open to a two-fight deal with Couture the first opponent on the ledger.  However, Finkelstein seemed less than assured that the UFC would budge from the original offer they made nearly eleven months ago.

A two-fight deal is really a nonstarter, but then again I think that is partially a negotiation ploy to start there.  Dana cannot allow Fedor to come in, destroy Couture and Lesnar, and then leave.  

Someone within the industry made the argument the other day to me that a one fight deal makes sense for the UFC.  Here is the argument:   "Even if Fedor wins, there is no major promotion that can take advantage of it in a meaningful way.  Affliction will have serious money issues going forward, and even if they run moderately successful shows every few months one day, that is no threat to the UFC.  Pro Elite cannot offer anywhere near what Zuffa can, and who knows that their future is at this point?  By doing the fight, the UFC would make millions in revenue on Pay Per View, they would deny any other promotion the chance to put the biggest fight ever on, and they could even get lucky and kill Fedor's myth if Randy beats him."

I am very skeptical of this argument, though I concede that allowing another promotion to do Randy-Fedor would be a huge loss for the UFC. 

"The basic story is this...Coleman really doesn't want the fight."

-- Dave Meltzer, explaining why Cheick Kongo is now the frontrunner to be Brock Lesnar's next opponent.

Jon Jones has only trained MMA for 9 months, but he made his UFC debut this past weekend, and he convincingly beat Andre Gusmao.  Jones obviously still has a lot to learn, but he showed an incredible amount of potential in this fight, busting out great takedowns and really innovative striking.  He tried a lot of insane stuff, none of which really landed flush, but he kept Gusmao reeling and guessing the entire fight.  I'd like to see him fight the winner of the Houston Alexander vs. Eric Shafer fight, or maybe some of the guys from the WEC that come over.

Credit to Bloody Elbow reader Smoogy who posted these over at at The Underground.